CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.
UPDATE 1-China Shenhua says hopes to restart talks on Mongolia mine
* Shenhua in talks to buy assets in N.America, Africa, Australia, Indonesia -CEO
* Coal sales this yr seen exceeding earlier target (Recasts with quotes, details)
HONG KONG, March 26 (Reuters) Shenhua Energy Co Ltd , China's largest coal producer, expects its negotiations to invest in Mongolia's giant Tavan Tolgoi coal mining project to restart after the country's parliamentary elections in June, its CEO said on Monday.
"Because this year is Mongolia's election year, I think we will restart our talks when the election is over," Shenhua CEO Ling Wen told reporters at the company's results briefing.
Shenhua is the most competitive bidder for the project given its technology, transport infrastructure, access to the Chinese market and the backing of the Chinese government, he said.
Shenhua chairman Zhang Xiwu added that the launch of a railway linking Inner Mongolia's Baotou city with Mongolia later this year would give a further boost to Shenhua in the race for a piece of the project.
In July last year, the Mongolian cabinet said it would give Shenhua a 40 percent stake in Tavan Tolgoi's western block and 24 percent to Peabody Energy Corp of the United States. The remaining 36 percent would be given to a Mongolian-Russian consortium led by Russian Railways.
But after bidders from Japan and South Korea branded the process unfair, the Mongolian government backpedaled and said nothing had been decided yet.
Political uncertainty ahead of Mongolia's parliamentary elections in June has worried investors. Politicians in Mongolia are under constant pressure to be seen to getting a good deal for the country from resources investors.
The Tavan Tolgoi coal deposit in Mongolia's south Gobi region has estimated reserves of 6 billion tonnes of coal, including the world's largest untapped deposit of coking coal, used to make steel.
The western Tsankhi block holds about 1.2 billion tonnes of reserves, 65 percent of which is coking coal. It has an estimated production life of more than 30 years at 15 million tonnes a year.
Shenhua is scouring the world for other asset buys and is in talks to buy coal mines in North America, Africa, Australia and Indonesia, Ling told Reuters on the sidelines of the briefing, without giving further details.
Shenhua on Friday posted an 18 percent rise in 2011 net profit on higher domestic coal prices and increased production volume, supported by strong demand in China, the world's top coal producer and consumer, for its power plants, steel and cement industries.
Chairman Zhang told reporters that he expected Shenhua's coal sales volume to reach 425 million tonnes this year, slightly exceeding its previous target.
"From the sales momentum we have seen in the first two months of this year, we feel our full-year sales target now looks a bit conservative," Zhang said, adding that he expected double-digit coal sales growth.
Shenhua CFO Zhang Kehui said Shenhua aimed to keep its coal production cost increase at below 10 percent this year.
Analysts say the outlook for Shenhua and smaller peers Yanzhou Coal Mining and China Coal Energy is clouded by a slowing Chinese economy, government price controls and rising mining costs.
"Confidential" Agreement made by the former Minister Battulga is revealed
March 25 (Business-Mongolia.com) MP. Khurelbaatar, Chairman of the Cabinet Secretariat of the Government of Mongolia, has confirmed that "secret" agreement, made between Korean side, by MP Battulga, during his service at the Government of Mongolia in charge of Infrastructure, Construction and Urban Development. The agreement was made on the new development of the Mongolian Railway network in the south and east part of Mongolia.
His signature and other related evidences were re-confirmed by his former colleagues at Ministry, but was allegedly denied by MP Battulga.
Normal procedure according to the effective law of the Government, every agreement shall be presented to the Ministry level, in order to get their point of views and then, the responsible Minister shall bring the issue to the Cabinet Minister's Meeting for the final voting and approval. Only after that an official receives full power to sign.
Here is an excerpt from interview of Chairman Khurelbaatar: … " The Russian side made inquiry on this issue from PM S.Batbold, with questions … why are you changing previously agreed provisions and conditions in the agreement… why the state is taking 51% and grant 49% to the strategic investor of the railway that would be built by us… I saw the agreement and it was signed by former Minister, MP Battulga."
The following links are about the signing of the agreement.
Business-Mongolia.com will continue reporting this issue.
DRAIG MOBILISES TWO DRILL RIGS TO MONGOLIAN COAL LICENCES
March 26, Draig Resources Limited (ASX:DRG) --
• Draig secures two drill rigs to explore Mongolian coal licences
• Phase 1 drilling program expected to commence Saturday 31 March 2012
• Priority drilling on Teeg licence (13879x), Ovorhangay Province
• Draig to drill 13 holes for a total of 2000 metres
• Drilling to contribute to completion of JORC compliant resource, expected Q2 2012
Draig Resources Limited (ASX: DRG) ("Draig", or "the Company") advises it has mobilised two drill rigs and will commence Phase 1 of its exploration program on two Mongolian coal licences by the end of the week.
Phase 1 will comprise a 2000 metre, 13‐hole drill program over the Teeg (13879x) and Nariin Teeg (13581X) licences, located in the Bayenteeg District, Ovorhangay Province.
Earlier this month, Draig appointed drill contractor Ellehcor LLC to undertake Phase 1 of the exploration program to drill 13 RC holes across coal bearing sequences at depths of 120–200 metres. Two experienced coal geologists will assist with the drill campaign.
Draig Managing Director Mark Earley said: "Drilling these targets will help us identify both the presence and principal structure characteristics of the coal. We will initially use RC drilling for speed and economy and then spot core a number of those intersections for coal quality assessment.
"We are fortunate to have secured two rigs to site and, consequently, we would expect results from the Phase 1 program within weeks," Mr Earley said.
MEC: FULL SETTLEMENT OF THE REPAYMENT SUM
March 26, Mongolia Energy Corporation Limited (HK:276) --
Reference is made to the announcement of Mongolia Energy Corporation Limited (the Company") in relation to the extension of time for settlement of the Repayment Sum on 3 February 2012 (the "Announcement"). Unless otherwise defined herein, all capitalized terms used herein shall have the same meanings adopted, used, or referred to in the Announcement.
On 26 March 2012, the Company received the full amount of the Repayment Sum from Mr. Liu pursuant to the settlement proposal.
Related: ANNOUNCEMENT PARTIAL SETTLEMENT AND EXTENSION OF TIME FOR SETTLEMENT OF THE REPAYMENT SUM – MEC, February 3, 2012
1733 closed at HK$1.83 Monday
Winsway: ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2011
March 27, WINSWAY COKING COAL HOLDINGS LIMITED (HK:1733) --
• Turnover of the Group in 2011 was HK$11,610 million, representing an increase of HK$2,338 million or 25.22% over 2010.
• Proﬁt attributable to equity shareholders of the Company in 2011 was HK$1,051 million, representing an increase of HK$122 million or 13.13% over 2010.
• Diluted earnings per share were HK$0.275.
• The Board recommends a ﬁnal dividend of HK$0.016 per share for the year ended 31 December 2011.
Och-Ziff's Guildford Stake Reduced to 10.86% from 12.64% via Disposal & Dilution
March 27, Guildford Coal Limited (ASX:GUF) --
MSE STOCK EXCHANGE WEEKLY REVIEW
Ulaanbaatar, Mongolia, March 26 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange on March 19-23. In overall, 757.4 thousand shares were sold of 72 joint-stock companies totaling MNT 634.8 thousand.
Index TOP-20 was 21742.96 points increasing 201.94 units or 0.94% against the week earlier.
The total market capitalization was set at MNT two trillion 121.1 billion increasing MNT 17.2 billion or 0.8%.
Shares of "Khanyn material" /32.2%/, "Ereentsav" /31.9%/, and "Chatsargana" /25.0%/ increased, but shares of "Erdenet khuns" /27.6%/, "Mongol savkhi" /17.9%/, and "Ikh barilga" /15.0%/ decreased.
36 stocks closed higher, 24 shares declined and 12 shares remained unchanged.
Shares of "Remikon" /263.4 thousand units/, "Olloo" /185.5 thousand units/ and "Khokh gan" /156.3 thousand units/ were the most actively traded in terms of trading volume and in terms of trading value--"Sharyn gol" (MNT 159.6 million), "APU" (MNT 102.9 million), and "Tavantolgoi" (79.5 million).
Moody's reviews four Mongolian banks' ratings for downgrade
March 26 (Reuters) - Golomt Bank, Khan Bank, the Trade and Development Bank of Mongolia (TDB) and XacBank.
Norton Rose advises on first Mongolian renewable energy independent power project
March 26 (Norton Rose) International legal practice Norton Rose LLP is advising the European Bank for Reconstruction and Development (EBRD) and the Netherlands Development Finance Company (FMO) on the financing of Mongolia's first renewable energy independent power project (IPP).
The 50MW Salkhit wind farm is located 70km south east of the capital Ulaanbaatar and part of a renewable energy programme intended to reduce the country's dependence on coal. The financing of the project is due to close next month and the project will become operational in 2013.
London based partners Jeffery Barratt and Richard Hill, senior associate Chris Down and associates Christina MacGilp and Kate Freeman are advising EBRD and FMO on the project, together with Beijing based partner Tom Luckock.
Jeffery Barratt, partner, Norton Rose LLP, commented:
"Interest is growing in the Mongolian power sector. The Mongolian government has put in place a number of important legal and regulatory measures to support the development of the renewables sector and attract further private sector investment."
"This project is helping to pave the way for future projects, creating a bankable structure for further renewable and thermal projects. We're pleased to advise EBRD and FMO on what is a pathfinder deal and a first for Mongolia."
Mongolian Companies Go Big With Initial Forays Into The Global Debt Market
March 26 (bne) Given Mongolia had the world's fastest growing economy in 2011, it was only going to be a matter of time before the country sought to leverage its position as the latest global financial hotspot in order to raise funds on the international bond markets and underpin its go-to investment status.
And that was just what has happened in recent days as both Mongolian Mining Corporation (MMC) and the Development Bank of Mongolia (DBM) tapped fixed-income investors with benchmark-sized issues. Thanks to the buzz around the Central Asian state, both issuers were easily able to hit their desired bond size targets and also price the bonds at cheaper levels than initially hoped for.
On March 23, MMC became the first Mongolian corporate to access the international bond markets (Mogi: TDB I believe was actually first to issue international bonds) with a benchmark-sized $600m, five-year issue that's callable after three years. Bank Of America Merrill Lynch, ING and JP Morgan were book-runners in the deal, which featured an 8.875% coupon, at the tight end of the pre-launch marketing range of 8.875-9.00% and well inside the initial price talk of a 9.50% yield.
In total, the landmark offering attracted over $4.5bn worth of orders from over 330 accounts. Some 56% of the bonds were sold in the US, with 22% each in Asia and Europe. Fund managers bought 75% of the bonds, commercial banks 11%, and insurance companies, private banks and types of accounts came in for 14% of the deal. Thanks to the size of the issue, it will be included in all the major emerging market bond indices, which require that transactions need to be for a minimum amount of $500m to qualify for inclusion.
According to Moody's Investor Services, which assigned a 'B1' rating to the bonds, MMC is well placed to benefit from the strong outlook for Mongolian coal exports. The company currently operates two mines in the Gobi Desert in Mongolia and it exports its entire production to industrial end-users in China.
The proceeds will be used to fund MMC's infrastructure improvement and development plans, including its Ukhaa Khudag-Gashuun Sukhait (UHG-GS) railway project, as well as for working capital and other general corporate purposes, including exploration costs and debt refinancing. Given its ambitious expansion plans — MMC is planning capital expenditure spending of $940m in 2012-13 — and outstanding debt of $425m, MMC has been an active fundraiser of late, recently raising a $300m syndicated loan via Standard Bank to help refinance maturing debt.
The euphoric reception of MMC's pioneering corporate issue mirrored the frenzied buying that surrounded the $580m, 5.75%, March 2017 bond issued by the Development Bank of Mongolia on March 14, which effectively represented the first ever sovereign bond from Mongolia.
State-guaranteed DBM, established in 2010, is a government-controlled development bank that sees itself as a poster child for the Mongolian economy, which grew by 17.3% in real terms in 2011. That rampant growth was fueled by its position of a prime supplier of basic commodities to China, which enabled it to attract a record $3.8bn in foreign direct investment (FDI) in 2011. Last year, the country's exports reached an record high of $4.8bn – up some 64% on the previous year – thanks largely to the fact it became the largest supplier of coking coal to China, now the second largest global economy.
DBM was marketed as a key player in Mongolia's emergence from economic zero to hero, with the policy institution viewed as a prime driver in the country's efforts to drive forward its industrial and social infrastructure development, which is forecast to cost at least $25bn in the current decade. This will involve the construction of at least 100,000 affordable apartments plus the building of new rail, road and energy projects. As such, DBM was an appropriate choice of issuer to make the first major splashdown in the international bond arena. Previously the only offshore debt issuance from the country had come from the country's third largest commercial lender, Trade and Development Bank of Mongolia, which had launched two small issues in recent years.
According to Dosbergen Musaev, chief economist at investment bank Eurasia Capital: "The sheer size of infrastructure funding needs in Mongolia means that the Development Bank of Mongolia will need to tap international debt markets in the near future again and become a frequent issuer." Eurasia Capital believes that DBM will likely issue transactions in Chinese yuan, Japanese yen and Singapore dollars on the horizon in the next couple of years.
Meanwhile, Eurasia Capital expects that the success of DBM's sovereign issue, which was 10-times oversubscribed with total orders of over $6bn, will encourage a raft of bank, corporate and municipal issuers to follow its lead and tap the international bond market, thus cementing Mongolia's emergence from obscure bit player in the frontier markets sphere to an increasingly mainstream actor in emerging market terms. Musaev also believes that foreign investors are also likely to look more favorably on local bond issues in Mongolia now that there is offshore benchmark issuance "We expect to see a positive spillover effect on domestic bond market."
Mongolia to Grow at 20% in 2012: Fund Manager
March 26 (CNBC) Mongolia could be the fastest growing economy in the world this year, with gross domestic product expanding 20 percent, according to Alisher Ali, Managing Partner at Silk Road Management.
An increase in exports, government spending and major mining investments like Rio Tinto's Oyu Tolgoi copper-gold mine will be the key drivers of growth. "You're starting from a low base so even if commodity prices go down, the increase in output will still allow Mongolia to be the fastest growing economy," Ali told CNBC, whose firm manages a $30-million fund invested in various asset classes in Mongolia, including public and private equity and property.
He adds that a slowdown in China will not dent Mongolia's growth trajectory because Beijing will seek long-term resource supply deals from its neighbor.
Investors are lining up for a piece of the action. Mongolian Mining Corporation's (MMC) recent $600 million bond issue was subscribed nine times. A $580 million placement by the state-owned Development Bank of Mongolia (DBM) earlier this month attracted similar levels of interest.
"So that shows you people are very interested. They look at the example of Indonesia where you have seen successive credit rating upgrades and they expect Mongolia will go through the same process," said Ali.
Mongolian stocks, which have fallen about 10 percent in the past year, are at levels Ali considers "oversold". "We're already seeing the recovery in those stocks and I think this is a multi-year story."
He expects the benchmark MSE Top 20 Index to gain 30 percent in 2012. His top stock pick is Mongolia Mining Corporation (MMC), which is the country's largest coking coal producer with deposits located along the Chinese border.
As foreign direct investment continues to pour into Mongolia, the country's biggest challenge will be to prevent its economy from overheating. The country's inflation hit 11.1 percent in December.
The World Bank estimates government spending in Mongolia rose 56 percent in 2011 and is expected to increase another 32 percent this year.
Leighton names new Asia boss
March 26 (AAP) Leighton Holdings has appointed an internal candidate to head its largest international subsidiary.
Ian Edwards will be managing director of Leighton Asia, India and Offshore, which employs more than 11,000 people and generated revenue of $1.4 billion in calendar 2011.
Leighton Asia is based in Hong Kong and carries out work in countries including China, Mongolia, Philippines, Indonesia and Malaysia.
Leighton Offshore works on ocean-based projects, and is the subject of an Australian Federal Police investigation into allegations it made improper payments in connection with work to expand offshore loading facilities for Iraq's crude oil exports.
Mr Edwards has more than 30 years of experience in the construction industry, and has been Leighton's executive general manager for its business in Hong Kong, Macau, China and Taiwan since 2008.
He replaces acting managing director Bob Cooke, who was appointed in August 2011 after former Leighton Asia managing director Hamish Tyrwhitt was elevated to chief executive of Leighton Holdings.
Registering now for "MONGOLIAN MINING DIRECTORY-2013"
March 26 (www.mining.mn) "MONGOLIAN MINING DIRECTORY -2013" which provides information database for Mining companies, investors, suppliers, service companies, government and non government organizations will be published for the fourth year to commemorate 90th year anniversary of Mongolian Mining industry. The MMD is distributed free of charges through international and domestic mining companies, international conferences and exhibition, embassy offices in Mongolia and foreign countries to investors.
We welcome everybody who is interested in advertising their products and services in "MONGOLIAN MINING DIRECTORY -2013" to Mongolian mining industry participants. For more information please visit: www.mining.mn, www.mongolianminingdirectory.mn or call us at +976-70115590.
Link to release (Mongolian)
ДӨРӨВ ДЭХ ЖИЛДЭЭ ХЭВЛЭГДЭХ ГЭЖ БУЙ "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ-2013" НОМОНД ЗАХИАЛГА АВЧ ЭХЭЛЛЭЭ
March 26 (www.mining.mn) Хэдийнээ хэрэглэгчдийн төдийгүй гадаадын хөрөнгө оруулагчдын эрэлт хэрэгцээтэй гарын авлагын нэг болоод байгаа "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ-2013" номыг МУУҮА болон Монголын уул уурхайн мэдээллийн нэгдсэн сан Mining.mn хамтран дөрөв дэх жилдээ Монголын Уул Уурхайн салбар үүсч хөгжсөний 90 жилийн ойг тохиолдуулан эрхлэн гаргах гэж байна. Уг лавлах ном манай улсын уул уурхайн салбарт үйл ажиллагаа явуулж буй бүх компани, ханган нийлүүлэлтийн болон уул уурхайн салбарт үйлчилгээ үзүүлэгч аж ахуй нэгж, төрийн болон төрийн бус байгууллагын нэгдсэн мэдээллийг авах боломжийг бүрдүүлж гадаад, дотоодын уул уурхайн компани, Олон улсын хурал үзэсгэлэн болон Монгол Улсад суугаа Элчин сайдын яам, гадаад улсад суугаа Монголын Элчин сайдын яамдаар дамжуулан хөрөнгө оруулагч нарт үнэ төлбөргүй хүргэгддэгээрээ онцлог бөгөөд уул уурхайн салбарынханы ширээний ном болж чадсан юм.
Анх "Монголын уул уурхайн нэгдсэн лавлах-2009" номыг 5000 хувь, 2010, 2011 онд тус бүр 10000 хувь хэвлэж, захиалгын дагуу үнэ төлбөргүйгээр уул уурхайн салбарынханд хүргэж байсан. Анхны "Монголын уул уурхайн нэгдсэн лавлах-2009" номны бүтцийг үзвэл 28 хувийг уул уурхайн компани, 19 хувийг ханган нийлүүлэлтийн компани, 24 хувийг уул уурхайн салбарт үйлчилгээ үзүүлэгч, 10 хувийг төрийн болон төрийн бус байгууллага, мэргэжлийн холбоод, 19 хувийг уул уурхайн салбартай холбоотой бусад компани, байгууллагын мэдээлэл бүрдүүлж нийт 98 компани албан ёсоор сурталчилгаагаа байршуулсан. Харин "Монголын уул уурхайн нэгдсэн лавлах-2011" номны хувьд 33 хувийг уул уурхайн компани, 26 хувийг ханган нийлүүлэлтийн компани, 30 хувийг уул уурхайн салбарт үйлчилгээ үзүүлэгч компани, 7 хувийг төрийн болон төрийн бус байгууллага, мэргэжлийн холбоод, 4 хувийг уул уурхайн салбартай холбоотой бусад компани, байгууллагын мэдээлэл бүрдүүлж нийт 275 компани албан ёсоор сурталчилгаагаа байршуулж байв.
2009 онд гаргасан номноос 2011 оны лавлах номны мэдээлэл бараг 2.8 дахин нэмэгдсэн нь уул уурхайн салбарт шинээр үйл ажиллагаа явуулах аж ахуй нэгжийн тоо эрс нэмэгдсэн, тус лавлах номны хэрэглэгчдийн эрэлт хэрэгцээ нэмэгдэж мэдээлэл, агуулга, хэлбэр нь жилээс жилд баяжиж байсныг гэрчилж байна.
Мөн өмнөх лавлахуудад уул уурхайн салбарын хэтийн төлөв, уул уурхайн интернэт хөтөч, чухал шаардлагатай утасны дугаар зэрэг шаардлагатай бусад мэдээллүүдийг багтааж мэдээлэл олж авах хайлтын хамгийн хялбар шийдлийг сонгож чадсан юм.
Монголын уул уурхайн салбарынханд болон гадаадын хөрөнгө оруулагч нарт бүтээгдэхүүн, үйлчилгээгээ хамгийн хүртээмжтэй хүргэхийг хүсч буй та бүхнийг "МОНГОЛЫН УУЛ УУРХАЙН НЭГДСЭН ЛАВЛАХ -2013" номтой хамтарч ажиллахыг урьж байна.
Лавлах номонд мэдээлэл, сурталчилгаа байршуулах, захиалга өгөх зэрэг дэлгэрэнгүй мэдээллийг 70115590 утсаар холбогдож авахаас гадна www.mining.mn цахим хаягаар тус тус орж сонирхох бололцоотой.
New Erdenes MGL CEO: Work at Baruun Tsankhi will begin soon, even without an investor
March 22 (Mongolian Mining Journal) The recent appointment of Dr. Ya.Dolgorjav as Executive Director of Erdenes MGL LLC raised eyebrows as he is not a mining professional, and was now put in charge of 15 strategically important mines. His last job was as Ambassador to Cuba and he had earlier been, among other things,a professor at the National University of Mongolia, Rector at the Academy of State and Social Studies, Dean at the Academy of Management, Director of State Management School, an MPRP Committee Director, and policy adviser to the President of Mongolia.N.Ariuntuya talks to "the outsider" to seek his views on several burning and sensitive issues.
Did the appointment surprise you? What do you see as the main challenges of the new job?
Yes, this job is quite different fromthe others I haveheld, but I see this is an advantage that I am here without any preconceived notions. I shall be guided solely by the legal framework when major policy decisions are made, and the daughter companies that will be in charge of different projects and mines structured. Having said that the appointment was a surprise, I must add that behind every surprise, there is a hint of inevitability.My previous appointment ended just when Erdenes MGL needed someone at its helm to set in place regulations and start operations according to the Law on the Human Development Fund, issue shares to the people of Mongolia, and separate itsmanagementfrom that of its daughter company Erdenes Tavan Tolgoi.
It is my guess that I was considered for the job because I had spoken of the need forhuman resources development in Mongolia long before there was any talk of distributing among the people the benefits of economic growth, and of putting to productive use the huge revenues expected from mining. What could be popularly seen as a disqualification is actually my biggest qualification for the job. True, I have never held any mining-related licence or owned shares in a mining company, and am a comparative stranger in this field. But the fact that I have no axe to grind is my strength. I am free to put the people's interest ahead of everything else.
As for challenges, there has been nothing specific so far. Each day and every step can be seen as a challenge, though.
It's actually only days since you started. What have been your first impressions? Please share with us your idea of what needs to be done in the near future and further ahead.
More time is needed to be fully acquainted with the job, and I shall learn as I work. You must be knowing the saying, "If one wants to learn how to swim, one must get into the water first." Mongolians do not have deep or long experience of all the business of international mining, investment, collaboration etc. We shall have many occasions to be careful of complexities,wary of confusion, and to strive to realise our goals.
As for the immediate priorities, we need to strengthen Erdenes MGL LLC as the parent company, formulate the collaboration procedures and agreements with the daughter companies, identify necessary amendments to the company laws according to the guidance given by Parliament and the Government, expand the operations of the company to conformto the Human Development Fund Law, deal with the issue of distributing shares to the people,and of transferring State-owned shares of other strategically important mines to the company, and much more. These have to be accomplished in a way that Erdenes MGL will be seen as a model for companies owned by the people. Our guideline is a recent statement by Prime Minister S.Batbold which said, "We will support companies and entities that are owned by the people and the system of oligarchies will be changed."
Have you visited mine sites?
I have not yet managed to make the time for this but I have held meetings with senior managers. As for now, I'm making myself familiar with structures and systems by going through papers. I have met with the Mongolian representatives onthe board of Erdenes Oyu Tolgoi, another newly established company, and with the Executive Director of Oyu Tolgoi LLC, MrCameron McRae. The State owns 34 per cent of Oyu Tolgoi and, therefore, it is necessary that we have a proper understanding with OT LLC. One of our directors, G.Temuulen, looks after issues regarding Oyu Tolgoi. We give much importance to the views of experienced professionals and specialists. Of course, the big issues will not be handled only by them, we shall need generalists. I think our company's success will depend on proper collaboration between specialists and generalists. I certainly value the inputs of professionals on certain aspects of the company's operations, but I don't think I need go to college to get a degree in mining.
Neighbouring countries have several companies that operate on a global stage, like China's Chinalco and State-owned Rostechnology in Russia. There is general expectation that Erdenes MGL will become as big as them. How do you see the future of Erdenes MGL, and will it generally work in the same style as these?
The two you mentioned do not operate in the mining field alone. They are business directed companies that make investments in new technologies and innovations, and undertake research work in their field. Our main mandate is tocentrally accumulate the revenue from strategically important deposits, and to create a stable and permanent corpusthat will be put into the Human Development Fund.
Gateway to Asia exhibition: Russian businesses in Mongolia
March 26 (UB Post) Gateway to Asia (Vorota v Azi u) exhibition will be organized in the Russian city of Irkutsk from March 27th to 29th . Over 60 prominent company representatives from Irkutsk will participate in the exhibition. This is the second time this exhibition is being held. It is organized by the administration of Irkutsk city.
This is an interview with A. A. Sidorov, CEO of Business Contact. This company was founded in 2002 and runs operations in Mongolia – it has been 10 years since the company began contributing to Mongolia and Russia's business relationship.
Please introduce the Russian companies that will be present at the exhibition.
There are a number of Russian companies that Mongolians are very familiar with at the exhibition. For example, Belorechenskoye, an egg producing company, and Yanta, which has been exporting mayonnaise to Mongolia for a long time now.
I'm also pleased to say that representatives from Irkutsk universities will be at the exhibition. Additionally, there is a new company entering the Mongolian-Russia trade which produces chicken. It seems that Mongolia purchases all its chicken from China and I can assure you, chicken from Russia has better a taste and quality.
What can you say about the organizers of the exhibition?
From the Mongolian side, the Mongolian National Chamber of Commerce and Industry and from the Russian side, the Irkutsk State Administrations are supporting the exhibition. This move shows significant progress between Mongolian and Russian businesses and economic relationships. Recently, Mongolia held a business exhibition in Irkutsk. Gateway to Asia is a friendly reply from Russia.
Will there be representatives from the mining sector or perhaps from the meat business at the exhibition?
Yes, for example Rudoremontni Zavod is participating in the exhibition mainly to supply mining equipment and machinery and also provide technical knowledge on repairing mining equipment. As for meat, I am wondering what will happen as the price of meat is skyrocketing in Mongolia right now. The Russian Minister of Agriculture will be present at Gateway to Asia so I'm sure he will talk about this.
It is known that since there are constant problems and delays with customs, taxes and visas between the tow countries. Will there be a discussion specifically designated to resolve these sorts of issues?
Yes, these were always been a set of difficult problems for both Mongolia and Russia. There will be businessmen and administrative personnel present at the exhibition and of course this will be discussed. I think the Altanbulag area will play significant role in erasing delays within customs. If a business center is created there traders will be able to communicate with each other with no barriers.
MIAT EXPANDS TIES WITH KOREAN AIR
Ulaanbaatar, Mongolia, March 26 /MONTSAME/ Authorities of the Mongolian Airlines state-owned company (MIAT) and the Korean Airlines of the South Korea signed on Monday a memorandum of mutual understanding on widening of the strategic partnership cooperation.
The Korean Air company will cooperate with the MIAT by bringing the latter's service quality to a world level, ensuring implementation of a strategic goal of the MIAT to join the Sky Team (airline alliance), assist in improving an effectiveness of safety, flights, techniques and expenditure management.
The companies' authorities consider that the air transport has a main role in expanding the economic and commercial development of the both countries.
Present at the ceremony were S.Batbold, the Prime Minister; and Ts.Dashdorj, the Minister of Road, Transportation, Construction and Urban Development.
MONGOLIA-SWEDEN CONSULTATIVE MEETING HELD
Ulaanbaatar, Mongolia, March 26 /MONTSAME/ Diplomats of Mongolia and the Kingdom of Sweden exchanged views on the coutries' relations and cooperation at a consultative meeting between the Ministries of Foreign Affairs. The meeting took place on March 21-22 in Stockholm, Sweden.
It was co-chaired by G.Tenger, the Vice Minister of Foreign Affairs of Mongolia, and by Frank Belfrage, the State Secretary for Foreign Affairs of Sweden, with a participation of B.Enkhmandakh, the Ambassador Extraordinary and Plenipotentiary of Mongolia to Sweden, and other officials.
The diplomatic relations between Mongolia and Sweden were established in 1964, the Embassy of Mongolia opened in December 2009, bringing positive results to widening of the comprehensive relations and cooperation. The bilateral trade turnover reached USD 49 million by 2011 against the year 2010, increasing by almost three times. Mongolia has imported products such as cars, mining techniques and electric facilities from Sweden. Moreover, the Swedish International Development Cooperation Agency (SIDA) has rendered a development assistance of some USD 30 million to Mongolia in the last 20 years.
During the above meeting, Mr. Tenger said the government of Mongolia sincerely thanks the government of Sweden for the assistance which significantly contributed to transition of Mongolia to the market economy. He passed invitations to Sweden Minister of foreign affairs and the Speaker from their Mongolian counterparts.
After the meeting, the Vice Minister G.Tenger met with Dr. Bates Gill, a director of the Stockholm International Peace Research Institute (SIPRI); Mr. Vidar Helgesen, the secretary-general of the International Institute for Democracy and Electoral Assistance (IIDEA); and Ms. Ann Linde, the secretary of the Social Democratic Party of Sweden. They have talked about an Environmental Ministerial Conference of the ASEM countries to be held in May of 2012 in UB and on international seminar on education for democracy.
UN environment agency calls for urgent action to support Mongolia's reindeer herders
26 March 2012 (UN News Centre) Urgent action is needed to support Mongolia's reindeer herders and protect them from unregulated mining, logging, water pollution and climate change, among other threats, according to a report by the UN environment agency, released today.
The report by the UN Environment Programme (UNEP), "Changing Taiga: Challenges for Mongolia's Reindeer Herders," assesses the current living situation of Mongolia's reindeer herder community, the Dukha, of which only some 200 members remain, and explores ways to guarantee their livelihoods, as well as of preserving the ecosystem in which they live in.
"The taiga – the Dukha homeland – is a hotspot for biodiversity and is rich in natural resources, but it is also one of the regions of Mongolia which could suffer the greatest impacts of climate change over the coming decades," said UNEP's Executive Director, Achim Steiner.
Many herders, the report found, have abandoned pastures because of damage caused by unregulated, small-scale artisanal mining of gold and jade, which leads to deforestation, forest fires, chemical contamination and poisoning of water sources.
Mr. Steiner stressed that the challenges faced by the herders reflect challenges faced by communities across the world which are seeking to transition to a sustainable future that generates jobs and livelihoods while still protecting the environment.
In the case of Mongolia, its transition to a market economy in the 1990s resulted in eight million livestock being added to its pastures, significantly affecting traditional herding practices. In addition, certain measures to conserve biodiversity in the region, such as the creation of national parks and stricter hunting laws, have limited access to pastures and affected herding communities negatively since their subsistence depends on trapping wild animals.
Droughts and extreme winters in the past decade have also posed a threat to herders as they have led to widespread livestock deaths.
"As a culture tightly-coupled with the taiga environment, Dukha reindeer husbandry has played a significant role in shaping the environment and conserving the unique biodiversity surrounding them," said the report's Chief Editor, Kathrine I. Johnsen. "It is important that any protected area regulations or community partnerships take full account of the Dukha's needs and rights to access to their traditional pasture grounds and migration routes."
Other activities such as tourism have been both beneficial and detrimental for the Dukha community, the report states, as it provides herders with incomes and alternative ways to participate in the market economy. However, herders have altered reindeer migration routes to accommodate tourists, forcing animals to graze on pastures of poorer quality and limiting their ability to increase the herd size.
The report includes recommendations such as closely monitoring reindeer numbers and changes in migration routes, forming community partnerships to support biodiversity and traditional Dukha livelihoods, re-evaluating current hunting regulations, and providing assistance to develop local herders' institutions, among others.
NEMA prepares citizens for possible earthquake
March (UB Post) The National Emergency Management Agency (NEMA) of Mongolia along with the National Disaster Management Agency organized the "Protection and Evacuation Actions During Earthquake Damage" on March 22nd.
The training started at 4 pm with seismic sirens sounding to announce the start of the exercise. However, many citizens complained that they could not hear the sirens.
Currently there are 20 seismic sirens in Ulaanbaatar but the number will be increased to 60 by 2013. Additionally the NEMA is planning to create an integrated evacuation plan to be used in case of emergency.
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
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